Transport: Vice President Kallas welcomes European Parliament final agreement on new rules to open competition in the rail market

New EU rules to allow more competition on the rail market look set to come into force by the end of this year, following a final vote of approval in the European Parliament today. The new rules (Rail Recast Directive) tackle 3 major problems on the market: (1) strengthening the power of national regulators; (2) improving the framework for investment in rail (3) ensuring fair access to rail infrastructure and rail related services. They are a direct response to many complaints from operators in recent years.

"These new rules will very significantly change the way competition works on the rail market. This is a very substantial step forwards. At last we can close loopholes in the current laws that can allow discrimination against newcomers and block operators from providing new and innovative services."

"The high level of ambition of the European Parliament, is particularly encouraging as we look to the next package of measures to develop services on the rail market that the Commission will propose by the end of the year."

The main elements of the Rail Recast Directive are set out in detail in the attached MEMO/12/520. However, as a result of the negotiating process, the final compromise text also includes certain new and important provisions, which go further in terms of improving the functioning on the rail market. These include:

1) In relation to regulatory oversight,

Additional provisions to ensure the independence of rail regulators: Their staff can only be recruited by public authorities with no control over regulated undertakings and fired only on disciplinary matters and not for decisions they take. New cooling on and cooling off periods to control staff movements between for the regulator and regulated undertakings.

Establishment of a formal network for rail regulators to ensure co-ordination and exchange of best practices as well as rendez vous clause to review such arrangement by the end 2014, so that further measures can be taken in this area if necessary.

Reinforced means for rail regulators: their human and material resources will have to be proportionate to the importance of the sector. They will have the possibility to ask the Commission to control national measures.

2) In relation to infrastructure financing and charging,

Reinforced obligations for Member States to ensure the balance of infrastructure managers' account over a maximum period of 5 years and to provide them public funding under multiannual contracts.

New mandatory system of modulation of infrastructure charges to provide incentives to equip trains with the interoperable European signalling system (ECTS) and common EU rules to modulate charges on the basis of the noise performance of trains.

3) In relation to market access conditions:

Extension of the independence requirements to the operators of essential service facilities to storage sidings and refuelling facilities.

New provisions on financial transparency: accounts must permit the process of allowing the verification of separation of financial flows between infrastructure managers and railway undertakings.

A rendez vous clause on unbundling: The European Commission is requested to issue new proposals by end 2012, in order to develop further a framework to facilitate non-discriminatory access building on existing separation requirements.

What happens next?

The compromise text needs formal approval by Member States, but the political way is now clear for a second reading final agreement. That would allow the new legislation to come into force by the end of 2012 and its full implementation by early 2015 after transposition in national law.